Deduct TDS while receiving payment.

samsung

This is regarding TDS in IN version. I am using NAV 2009.
I am trying to create NOD lines for a customer, but while doing so, the system is not looking up at TDS Nature of Deduction, but TCS nature of collection.

I remember that in 4.0, it looked up for TDS nature of deduction.
Please let me know behind the logic of this lookup, and how can I calculate TDS while receiving payment from a customer.

Thanks.
Sam Sung

mohana_cse06

Difference between TDS and TCS

TDS is actually a deduction while TCS is a collection of
tax at source, meaning thereby, if X makes payment of Rs.
100 to Y and such payment is covered under the provisions
of tds, then X will have to deduct tds say Rs. 10 and then
will make payment of Rs. 90 to Y.
While, if X sells goods worth Rs. 100 to Y and such goods
are covered under the provisions of tcs, then X will
collect Rs. 10 more from Y and hence the sale will be for
Rs. 110.
In both the cases Rs. 10 will be deposited to govt. account.
Hope it will clarify the provision a little clear.

For Customers, we use TCS..why do want to use TDS?

Previously in 4.0. there were 2 seperate forms for TDS and TCS
but now we have only 1 form and based on the Type selection at header, it will open TDS or TCS in lines..

Condition	Table	Field	Table Filter
Type=CONST(Customer)	TCS Nature Of Collection		
Type=CONST(Vendor)	TDS Nature of Deduction		
Type=CONST(Party),TCS Party=FILTER(Yes)	TCS Nature Of Collection		
Type=CONST(Party),TCS Party=FILTER(No)	TDS Nature of Deduction

samsung

Dear mohana_cse06,

Let me explain you with an example.
X=Receiver of service and Y=Provider of service.

X receives invoice from Y and puts entry in his system-
Service A/c Dr. 100
Y Cr. 100

while, Y makes and entry as-
X a/c Dr. 100
Income A/c Cr. 100

Now X pays as-
Y Dr. 100
TDS Cr. 10
Bank Cr 90

and Y receives as-

Bank A/c Dr. 90
TDS Recoverable Dr. 10
X Cr. 100

Now how does I set up Y's system to receive Rs. 10 Less?? Anyhow, Rs.10 is the Tax Deducted as source for Y too.

I may sound wierd as I am not an accountant, and my accountant is not available.
Thus, appreciate if you could help me in explaining the logic and setup.

mohana_cse06

I am also not a functional consultant
in your case Y-->X should be TDS and X-->Y should be TCS (as per my above example)

wait for any functional expert reply..

ssingla

AFAIK TDS on customer payment is not available since 4.0 SP3. There is a functionality of TDS Certificate receivable which will mark the transaction on which customer is suppose to issue TDS certificate. TDS certificate amount will be updated once the certificate is received and entered in NAV.

The entry of tds receivable which would normally go to advance tax has to be posted manually.

Deep

Since the TDS recoverable in your case is like an advance tax deposit as Sandeep explained, you can manually split and post the entry in the system in separate G/L Account. Later on, you can adjust the same G/L balance at the end of year with your company tax on gross profit (PBT).